A consortium of investors led by Disney (DIS.NYSE) and including Google (GOOG.NASDAQ) is said to be positioning to take a 30-40% stake in Bus Online, China’s largest in-bus digital media company. Talks regarding the US$100 million-plus investment – which would involve the purchase of old shares as well as new shares issued through private placements – are at an advanced stage. Disney’s interest in Bus Online is unlikely to be merely financial; a partnership between the two companies offers a platform to promote the Disney brand in China.
Bus Online earned revenues of US$46.07 million in 2009 and has long been a favorite of venture capital investors, having received US$80 million in funding since 2004. The company hopes to expand its coverage by placing screens in Yum! Brands’ (YUM.NYSE) KFC outlets in China. Disney would in theory have the opportunity to deliver its media content via these channels.
Cooperating with a media giant like Disney gives Bus Online access to the experience and long-established global relationships of a well-recognized domestic and international brand. This could translate into improved levels of advertising integration and penetration. Should the investment go through, Bus Online will pose more of a threat to its in-bus competitors – VisionChina (VISN.NASDAQ) and Towona – and perhaps even more established outdoor advertising players like FocusMedia (FMCN.NASDAQ).